HOMEOWNER ASSOCIATION TITLEHOLDERS ARE "HUMAN CAPITAL

"by D. Vanitzian(c)
2007 Donie Vanitzian

When criminal liability is not charged against the "criminals" in an association, then the titleholders become the Human Capital
used to fund the criminal activities and wrongdoing.Titleholders fund the
excesses of errant boards and their errant third party vendors and agents
because the California laws have no meaningful incentive for deterrence of such
crimes when they occur in a residential common interest development.While
homeowner association-related "crimes" are taking place in record numbers today,
little is being done to prevent their occurrence. The criminality linked
with wrongdoing in homeowner associations more often than not revolves around an
economic and financial benefit flowing to the wrongdoer--whether it be a third
party vendor or board director or association advisors. Even a board
director's $15.00 haircut paid or reimbursed by the association might be viewed
as a "financial benefit." If the board member uses the services of the
association to improve himself and his own property, he has obtained a
"financial benefit" that is quantifiable and should be prosecuted by the
corporate entity. If the board member is not fined for paying his
association's monthly dues late, he has obtained a "financial benefit." If
a board director takes his friends to lunch at association expense, that is a
financial benefit to the individual board member--NOT the association and
certainly NOT the titleholders who fund the bank accounts for the association or
who funded the lunch. [FN1]BENEFITS TO THE ASSOCIATION AND BOARDWhat of
the board director who does not receive a "financial benefit" for his services
on the board? There are also non-economic benefits for being a
director. In one such situation a board director was known to "get off" by
signing his name as the association's C.E.O. This allowed him to represent
himself to the outside world as a "somebody" where he would have otherwise been
a "nobody." Playing C.E.O. and receiving the non-economic benefits of
"recognition" accolades, plaques, applause, and the like, are no different than
the $15.00 haircut. Why? Because they deprive the titleholders of
full advantage of the corporate protocol at the expense of an inept board
director who has nothing better to do than waste his position on the board and
misuse authority => for no other reason than "he can." [FN1] The same can be
said for the board director who is a "yes man" to a management company or
association advisors. Actions like these should be considered a WASTE of
corporate assets--the assets being valuable time lost that cannot be regained at
any cost due to the connivance individuals merely sitting on the board of
directors because it makes him/them feel important or boosts their collective
egos. Doing "nothing" but sucking up to vendors is also costly and it is a
breach of the board's fiduciary duty to every owner who has an interest in
property and whose assets are at risk in that development. [FN1]Board directors
are supposed to be independent thinking decision makers. Playing "follow
the leader" is a breach of duty, especially when the "leader" is a board
director beholden to a vendor with a contract at that association. It is
also a breach of duty to "follow" third party vendors AS IF they are leaders,
and to do the same with management companies, their personnel, association
advisors, or managers in general places the association and all its titleholders
at risk. The board's duty is to supervise and oversee every such entity without
fail and to NOT follow them to the grave or jail, whichever the case may
be. Yet at the same time, every board of directors are vested with the
authority to, in a sense, criminalize and punish the behavior and actions of
their neighbors who own property and reside under the same corporate umbrella
that the board director controls. [FN1]One author states "punishment is a
conventional device for the expression of attitudes of resentment and
indignation, and of judgments of disapproval and reprobation."[FN2]
Therefore, if the board of directors' failure to impose punitive measures
against the wrongdoer and/or it does not punish another board director or its
own agent(s) for wrongdoing, then the message to ALL others is that the
deterrence factor is undermined and a new benchmark has been set for the
corporate value system.HOMEOWNER ASSOCIATIONS VALUE LAWBREAKERS AND WRONGDOERSIf
the wrongdoer is allowed to remain in his or her position on the board or as an
agent of the association, the message becomes this: There is "value" to
breaking the corporate laws (i.e., governing documents and statutes) and
goodwill, because prosecution is not forthcoming and there will be no stigma
attached to the individuals who committed the wrongdoing. Compounding that
problem are the fines and penalties levied against titleholders when they
[subjectively] break a so-called rule. For sake of argument, say the owner
is late in paying his homeowner monthly assessments. The owner is
typically vilified in the association's newsletter or minutes, and shunned in
this oh-so-wonderful-community. This owner has just witnessed board
members commit crimes amounting to, for sake of arguendo, hundreds of thousands
of dollars in misappropriation of funds (or worse) without any punishment or
stigma of criminal prosecution. What now is the actual "value" of punishment
consisting of late charges, interest, and fines against the owner who paid his
monthly assessment after the due date? Why should that owner be forced to
pay even one dollar in fines, interest, and late charges after witnessing board
directors ripping-off hundreds of thousands of dollars from the association that
this same owner, along with the other Human Capital, statutorily fund?Another
example could easily consist of a board's actions that are willful, but not
statutorily remedied, such as failure to generate minutes, provide notice of
meetings, produce a pro forma budget, and more. What happens to the board
of directors who commit their wrongdoing through third party vendors acting as
association agents? Is the board held statutorily liable for failing to
supervise those agents' actions, if not, why not? In an attempt to
avoid prosecution, boards are always free to hire board advisors using
titleholder Human Capital deposited in the association bank account--aren't
they?Because of unbalanced laws, owners are deprived their indignation against
the criminal or the perpetrators of the wrongful acts. It is the lack of
condemnation by those at the helm of the corporate structure against the
perpetrators that so infuriates owners who are used as Human Capital to fund
those bad acts and the façade of "community." Unfortunately, too many
titleholders will spit out phrases like "conflict of interest" as if the
accusation itself has meaning. In the venue of homeowner associations,
"conflict of interest" is a meaningless nondescript phrase that, unless the
phrase exists in the association's governing documents--it is nowhere PER SE to
be found in the California statutes as it pertains to common interest
developments. Needless to say, don't count on those words being in your
documents--and--don't look to the California statutes to provide a meaning for
"conflict of interest" as it applies to homeowner associations so that the
wrongdoer may be prosecuted--it won't happen. Thank the California Law
Revenge Commission and their Legislature buddies for that. Nearly all
corporate culpability has been neutralized by statute to favor, if not "protect"
the "business" of associations. The legislature has consistently diffused
the association's responsibilities as it relates to any wrong doing by its
corporate officers.California's legislature's view towards homeowner
associations appears to be a combination of (a) legislative diffusion (b)
punishment is left up to the association, and (c) use the election process of
removing and replacing the board. The legislature fails to recognize the
ineffectiveness of the Davis-Stupid Act in general, and the fatally flawed
statutory scheme for association election processes; using either "in the place
of prosecuting wrongful behavior" is equivalent to sinking in quicksand.
It is because of this inherent circular flaw, that any deterrent in situations
like this must be sufficient to "qualify" as a "deterrent" and must be
sufficient enough to prevent future abuse. With the presence of a built-in
"prisoner's dilemma" no such deterrent can be effective. [FN3] TITLEHOLDER
EQUITY IS THE ASSOCIATION'S WINDFALLHuman Capital is used to supply the
homeowner association's cash flow. Other than a pat on the back, if lucky,
titleholders producing said Capital get nothing in return. If the Capital
is stockpiled at the time the owner sells and moves away, the stockpiled money
is left behind. If the homeowner association is a debtor and a creditor
suffers a loss, because the homeowner association is a corporation, in the name
of "nonprofit mutual benefit corporation" that creditor's losses become the
debtor association's reorganization process. Of course, the oxymoron of
"mutual benefit" is not to be missed. This may answer the question as to
why gardeners now contract with homeowner associations so that a breach or
failure to pay may then be remedied in court by an order to assess the Human
Capital.The California legislature along with the California Law Revenge
Commission a.k.a. California Law Revision Commission is very clever
indeed. Knowing that "corporations" are rarely prosecuted "criminally,"
and on the odd chance that they are prosecuted -- it's typically years in the
making. One of the few ways that type of prosecution would occur would be
through stripping away its corporate immunity. Another reason owners who
have been harmed by the flailing legal structure of homeowners associations is
because they have been unable to attach any meaningful "liability" to the
corporate fiction. Courts apparently are extremely hesitant to hold the
board members and their aider and abettor management companies or other advisors
"responsible" for their actions. [FN3] This is evidenced by the fact that
white collar crime, now becoming a mainstay in these so-called communities, is
rarely prosecuted in-house (i.e., by the board and association against the
tortfeasors and/or wrongdoers) AND is also rarely pursued by the corporation
against its third-party vendors, such as management companies. The crime
is condoned.Look how sneaky the California Law Revenge Commission has been in
the past seven years with their support of the California legislature and their
industry buddies. Through promoting the nonprofit mutual benefit
corporation fiction and negating "corporate liability" in general, the
California Law Revenge Commission -- a wholly useless agency at best -- has
ensured the longevity and existence of homeowner associations to the detriment
of the Human Capital banking system. Of course, those funding the
fraudulent schema are the titleholders. Because common interest
developments live in perpetuity, that is "forever;" without any readily
enforceable statutory deterrence measures in place, the path of destruction is
virtually endless.It's really very simple; unless you are prepared to be the
Human Capital for that homeowner association, don't buy in a common interest
development. ~0~[FN1] Author note: this article uses "he" to mean gender
neutral. Vanitzian, Common Interest Developments--Homeowners Guide
(Thomson/West, 2006-2008)[FN2] Joel Feinberg, Doing and Deserving (1970) pg
78.[FN3] nd information and file complaints against management companies and
managers here: http://www.certifymyass.com

THE TEMPLE OF BLAME AB1921: ALL SHOCK AND NO AWE

THE TEMPLE OF BLAME

AB1921: ALL SHOCK AND NO AWE


Mr. B. Hebert
California Law Revision Commission
4000 Middlefield Road, Room D-1
Palo Alto, California 94303-4739

Re: Response to Memorandum 2008-12
Opposition to Assembly Bill 1921__
Table of Contents

I. Reality and Fiscal Impact
II. AB 1921 Lacks Adequate Checks and Balances
III. AB 1921 Misleads the Public
IV. Indifference to Statutory Integrity and Caselaw
V. CLRC Has a History of Bastardizing Statutes
VI. "Recast" Is Just a Fancy Word for "Rewriting Law"
While Bypassing the Democratic Process
VII. The California Legislature Must Abandon Assembly Bill 1921
VIII. Far-reaching Problems with Assembly Bill 1921:
IX. Law Revision Interference with Legislation

Dear Mr. Hebert,

Make no mistake, Assembly Bill 1921 shatters the American dream for millions of residential deed-restricted property owners and many believe that the California Law Revision Commission has exceeded its jurisdiction.
I have received numerous letters and communications from deed-restricted titleholders to my co-authored Los Angeles Times, Real Estate section column titled Associations regarding the California Law Revision Commission's wholesale destruction of the Davis-Stirling Act. On March 24, 2008 I authored an Editorial discussing some of the problems associated with Assembly Bill 1921. It was published by the Central Valley Business Times and can be viewed at www.centralvalleybusinesstimes.com letters to the Editor.
In MM08-05, the CLRC actually had the gall to state that it "took over two and half years in developing the recommendation, with every step open to public scrutiny and input." Only the CLRC could believe that self-serving statement. Worse, in the First Supplement to Memorandum 2008-12, Legislative Program: AB 1921 (Saldaña); the CLRC chastises the "Attorney Group" in stating:

"When AB 1921 was heard by the Assembly Committee on the Judiciary (April 29, 2008), the Committee Chair admonished the CID Attorney Group for raising concerns after the bill had been introduced, rather than during the Commission’s deliberative process, and directed the group to submit a specific and detailed list of its concerns to Assembly Member Saldaña by mid-May. The purpose was to reduce the group’s concerns to concrete terms so that they could be addressed through discussion and amendment. The list of concerns has not yet been provided."

Lest the California Law Revision Commission forget, it was the CLRC who claimed to be working on this project for two years¾not the Attorney Group. The CLRC had/has the duty of performing due diligence prior to embarking on such a nonsensical project at taxpayer expense¾not the Attorney Group¾not the public¾and certainly NOT the titleholders. The duty is YOURS, the California Law Revision Commission.
But this, from Memorandum 2008-12, stating "Memorandum 2008-11 described the general response that AB 1921 had received from CID interest groups. Many of those groups expressed new concerns about the bill, that had not been raised during the Commission’s two and a half year deliberative process" takes the cake. What planet are you on? When you make ridiculous statements like that how can the public believe anything you put forth?
The CLRC's arrogance in carrying out their pie-in-the-sky posturing by saying "the Commission had a clear practice of excluding any substantive change that might be controversial in the legislative process" is simply unsurpassed. The implication of that one statement alone invalidates EVERYTHING the CLRC does. Along with countless others, my suggestions were pooh-pooh'd by the CLRC, ignored by Saldana's office, ignored by the Assembly and Senate Committees and not published alongside other opposition papers. This out-of-control freight train spearheaded by the CLRC is not only embarrassing it is costly and unnecessary.

I. Reality and Fiscal Impact
California is presently cash and income strapped to the tune of over $20 billion dollars with proposed cuts to be made in every State Department. Keeping that in mind, nothing is laudable or applaudable about Assemblyperson Saldana's Assembly Bill 1921, just as nothing is commendable about the countless "paid" hours expended by the California Law Revision Commission in bastardizing the Davis-Stirling Act. Frankly, the Act is bad enough without your help.
Assembly Bill 1921 complicates an already problematic statute. I am on the record demanding a moratorium on any Davis-Stirling Act rewrites until a "credible" study of the problems can be, and has been, accomplished. AB 1921 is the full employment act for special interest parasitic industries and California's legislators. It is shameful that the remaining few protections for the titleholder's vested property interests are dangerously diluted by the cumulative effect of this bad legislation.
Though they may fancy themselves oracles of legislation, California Legislators are instead, masters of self-delusion. While in the Sacramento Holiday Camp, these public sector parasites are rarely held accountable for the disasters they cause. Once their paychecks end, their pensions begin. For the past three decades or so, California statutes have resulted in a battle-scarred minefield memorializing the delusions of self-congratulatory legislators wanting their names in books of California law—at any cost. The bigger the special interest payments—the bigger the name in the books.
If ABomination 1921 is signed into law, the end game for titleholders is prohibitively expensive litigation.

II. AB 1921 Lacks Adequate Checks and Balances
Assembly Bill 1921's caption reads, "This bill would revise and recast the Davis-Stirling Common Interest Development Act." In other words it is the "rewrite" of an entire Civil Code Title of law.
Assembly Bill 1921 is voluminous in print and anemic in its practicality. It amounts to a wholesale rewrite of law already in force, interpreted by the courts, and relied upon for well over two decades. Notably, the proposed rewrite is short on substance and lacks justification for shredding laws already in place. AB 1921 purports to sacrifice the Davis Stirling Act by codifying vacuous Legislative oratory. Hiding reality under the guise of "legis-speak" lest their intent be exposed, the cumulative outcome of AB 1921 if passed, amounts to condemning owners to subjugate their rights to the whim of their rulers, be they boards, legislators, vendors, attorneys, judges, arbiters, or the like. It is an "implicit submission" to forces outside the homeowner's control.
A sober look at this preposterous legislation—devoid sufficient public input and competent research—reveals the imposition of unilateral substandard lawmaking. Assembly Bill 1921 consists of bad law: rife with loopholes, titleholder disenfranchisement, and remarkably poor drafting. Without adequate substantiation, one hundred seventeen sections, "Title 6," an entire Chapter consisting of Civil Code sections 1350 through 1378, are hacked out and rewritten in a matter of months by the few, with virtually no meaningful input from the many.
III. AB 1921 Misleads the Public
Much of the public is unaware that these shenanigans are taking place right under their nose. What homeowner has the resources on such short notice, let alone the time and knowledge to pour over 300 pages of newly conceived laws and then sit down and attempt to craft a letter to their Legislator explaining their views on the matter? I tried to do that and was told the Legislators and the Legislature are only interested in "groups." My letter was not even admitted into the record, so intentionally ignored that the record baldly claimed there was "no opposition."
The level of scrutiny that should have gone into this massive rewrite was, and is, missing. What part of "fiscal impact" does this California Legislature not understand?
Our Legislature has a far higher duty to the public than it is practicing. Without delay, the Legislature should place full-page advertisements in major California newspapers for one year as well as notify every common interest development titleholder that laws profoundly affecting their ownership are in play.
To claim that the Internet provides "notice" is a self-indulgent fantasy. Not every homeowner is computer literate, or has a computer, or has affordable access to the Internet and a printer. And rare indeed is the Internet-enabled titleholder who searches daily to see if the Legislature is tinkering with his property rights. Let alone understanding the bloated Commission's purpose few homeowners have heard of the "California Law Revision Commission." Yet that Commission's dangerously misguided authorship of the proposed Assembly Bill 1921 will effect the lives, property rights, and personal assets of millions of homeowners in this state.

IV. Indifference to Statutory Integrity and Caselaw
Statutory changes tend to be of two types, renumbering-reindexing when societal change renders the current placement inadequate, and substantive changes in the law itself. By doing both simultaneously in Assembly Bill 1921 the Legislature renders impotent the public's ability to understand and comment on it.
Anyone who has ever had to find or follow the law knows the importance of stability of cross-referencing and the agony and cost wholesale renaming and reindexing impose. Moreover this renders much of case law unusable to all but the most sophisticated, well-funded researchers. Nonetheless, under the banner of "simplification" the California Law Revision Commission masks the enormous scope substance of its changes. In its enthusiasm for musical section numbers to cover its tracks and once again the CLRC excises "Title 6" from the Civil Code.

The initial heading of the former Title 6, "Wills", enacted in 1872 consisting of sections 1270 to 1377 was repealed by Stats.1979, c. 373, sec. 484 to make way for the present version of the Davis-Stirling Act monster. It should be noted that the purpose of moving "Wills" was to place it in Probate Code statutes.

Title 6 "Common Interest Developments" was hatched in 1985. Now its 117 Civil Code sections are littered by the detritus of the CLRC's self-aggrandizing musings also known as "Comments" throughout the Code's annotations. Here, "Common Interest Developments" stays in the Civil Code statutes but changes it numbering and alters text substance.

In 2007 the California Law Revision Commission reported that it would be "several years" before this "project" would be presented to the Legislature. Worth mentioning, is the fact that titleholders did not ask the Law Revision Commission to do this in the first place, but the Law Revision Commission was advised that the owners were against this rewrite of laws in the manner it was occurring. Having slipped this soporific to the public, the CLRC speedily cobbled together AB1921 to be introduced in less than a year.
Moreover, attempting to slip even alert observers another "mickey," it purported to address only "technical and conforming changes," shamelessly mischaracterizing an intentional revision bastardized of form and substance.

V. CLRC Has a History of Bastardizing Statutes
It appears that if a statute section is unclear, there's an excellent chance that the California Law Revision Commission had something to do with it. Responsible for wholesale disruption of entire sections of code, the California Law Revision Commission's pedestrian approach and sloppy analysis, has resulted in serious consequences, if not countless dollars needlessly spent by consumers throughout this state.
Presently, the Law Revision Commission's most recent project includes the bastardization of Civil Code Sections 1350 through 1378 all under the guise of “[t]he Law Revision Commission recommends that the existing Davis-Stirling Common Interest Development Act be repealed and replaced with a new statute that continues the substance of existing law in a more user-friendly form.”[1] So too, in justifying the morass it created within the Evidence Code, the Law Revision Commission states it did so “[t]o accommodate a wide range of mediation styles, the definition is broad, without specific limitations on format.”[2] Whatever THAT means. The Law Revision Commission continues to explain, “[t]he definition focuses on the nature of a proceeding, not its label. A proceeding may be a ‘mediation’ for purposes of this chapter, even though it is denominated differently …. This definition of mediator encompasses not only the neutral person who takes the lead in conducting a mediation, but also any neutral who assists in the mediation, such as a case-developer, interpreter, or secretary. The definition focuses on a person's role, not the person's title.”[3]
VI. "Recast" is Just a Fancy Word for "Rewriting Law" While Bypassing the Democratic Process
The audacity, let alone unmitigated arrogance that somehow the California Law Revision Commission is above the law and can perform such functions that are beyond its mandate, is unnerving. The Commission categorized their so-called "Statutory Clarification and Simplification of CID Law" as the panacea to problems plaguing such developments. What could possibly be "simple" about 300 pages consisting of some 85 cross over laws and no beta test as to its applicability?
Assembly Bill 1921 is not a revision; it is instead a rewrite of the LAW. A legalized pork barrel packed with goodies for the parasitic association industry and its vendors. It is an ill-conceived pork-barrel project that is proceeding without shame and accountability, with no end in sight.
If residential deed-restricted titleholders were ever under the mistaken belief that their Legislator could be an ally—by now they should know better. The public must understand that this cavalier rewrite will detrimentally affect the lives of millions of titleholders and prospective titleholders. Owners, who have dutifully spent decades coming to grips with understanding the Davis-Stirling Act, will be forced to start all over again. Frankly, some may not live long enough to figure it out. Others will likely employ a costlier route, that of hiring lawyers to explain an untested code to them with "on the one hand, on the other hand" and invoicing for it. Others still, may merely rely on the word of third parties whose interpretation of the codes may be slanted or just plain wrong.

VII. The California Legislature Must Abandon Assembly Bill 1921
While the text in Assembly Bill 1921 may look good on paper, it lacks useful application.
This massive, untimely project has far-reaching consequences for millions of titleholders. For all its pages of paper, and all the rhetoric, pomp, and circumstance, save the back-patting, the hundreds of pages of slop miserably fails to protect titleholder assets. It fails to eliminate longstanding problems of imbalance pertaining to mediation, arbitration, and litigation and the attendant costs thereof. And there are numerous problems related to those issues. Instead, it merely provides a laundry list of statutes as its prelude to a newly created mess with utter disregard as to its implementation in terms of "real life."
Apparently the only people throwing their hands up in disgust at the utter waste of "time," "resources," and "excess" in California's Legislature, are deed-restricted titleholders who lack adequate and meaningful representation in Sacramento. The millions of deed-restricted titleholders are left paying the price for bad laws, interference by special interests, and excess spending created by our legislators. It is scandalous the laws that are passed because some special interest entity wants it and can afford a lobbyist, rather than analyzing and researching laws that are necessary, and then proposing their introduction genuinely subject to public comment.
While the many problems with Assembly Bill 1921 are impossible to adequately address, here's a breathtaking example. Consider this newly hatched phrase slated to become law under Assembly Bill 1921: "An affidavit of delivery of a notice, which is executed by the secretary, assistant secretary, or managing agent of the association, is prima facie evidence of delivery."
Prima facie evidence!!! Might as well say "self-interested and unrebuttable evidence." It matters not what horse the drafter of that provision fell off of, what matters is that with the stroke of a pen something as egregious as what otherwise seem to be an innocuous "phrase" will become law—let alone prima facie evidence to be used against the titleholder with no viable avenue for rebuttable evidence.[4]
Imagine a third party vendor who contracts with the association, signing their name to an affidavit stating they did something when in actuality they did not. Imagine the board director secretary trying to cover his or her behind in a breach of fiduciary duty lawsuit for taking a person's home away from them, or instituting litigation against them, or penalizing them—merely by signing an affidavit. How can one disprove dishonesty if it is enshrined in the presumption of truth?
Imagine the same scenario if it were applied to fines, penalties, interest and late charges. The potential for abuse is overwhelming. Phrased alternatively, the venerable certified letter is replaced by the unsubstantiated claim from someone who has nothing to lose and everything to gain.

VIII. Far-Reaching Problems with Assembly Bill 1921:
• Assembly Bill 1921 has expunged the word "property" as it relates to the titleholder's vested interest.
• Other than to clarify "escrow" proceedings; define "claimants;" ownership of pets; roof repair or installation; survey questionnaires pertaining to defects; the term "homeowner" is mentioned little, and where it is mentioned it is wholly devoid legal significance rendering the term non-existent as it applies to the titleholder.
• Award of "attorney's fees" are mentioned over twenty-five times and not to the benefit of the titleholder.
• The titleholder is not provided with realistic redress and an avenue for providing penalties against associations, third party providers and advisors, and boards of directors. Assembly Bill 1921 fails to direct the benefits of any such penalties directly to the affected titleholder(s).
• Assembly Bill 1921 fails to provide a "Victims Fund" for any titleholder who is a victim to the bad laws and who suffers at the hands of the association, its third party vendors, providers and advisors, and boards of directors who break the laws.
• There should be no creation of an ombudsman department or agency because of the drastic fiscal impact it will have on the entire state and the owners. No such agency should be funded by residential deed-restricted taxation alone.
• Assembly Bill 1921 fails to provide per se penalties against third-party management companies and their employees and it fails to provide per se penalties against recalcitrant boards. Moreover, it fails to per se assist titleholders in protecting their assets, fails to provide a viable avenue of redress, other than prohibitively expensive litigation, for the mounting problems associated with common interest developments, and homeowner associations. Every avenue the titleholder attempts to pursue for "fairness" is a costly dead-end—thanks to California's obtuse Legislature.
• Assembly Bill 1921 fails to address a huge problem that is created by the lump sum rewrite that did not exist before. That is, the culmination of intersecting procedural demands such as Request for Resolution, mediation and/or arbitration causing a cumulative effect that often costs more and lasts longer than litigation itself. Needless to say, there are no guarantees that once initiated, any of those alternatives, ie, request for resolution, mediation, arbitration, will result in a viable resolution. Assembly Bill 1921 serves only to exacerbate these inherent statutory problems.

IX. Law Revision Interference with Legislation
The Commission's time has come and gone. It is no secret that on more than one occasion I have written the Governor imploring him to pull the Law Revision Commission's funding and/or altogether disband it.
Though paid handsomely while the rest of the State suffers great economic loss, cutbacks, and unemployment, the California Law Revision Commission no doubt believes they are only doing their job. That, however, should be a topic for debate. Often patronizing and condescending toward those in disagreement with its agenda, the Legislature not unlike the Commission, appear to side with, if not coddle the special interest industries. The standard response to the non-special-interest public is, "the staff recommends against that change."
Presently, the graveyards of repealed code sections caused by the Law Revision Commission's chainsaw approach in attempting to substantiate its grant money should be investigated. The Commission and the Legislature have created mass confusion for California consumers where none need exist. A first step to clarity and filling the over $20 billion deficit would be to zero out the CLRC budget and to thoroughly investigate the laws proposed by the State Legislature prior to passage.
For these reasons and much, much more, I oppose Assembly Bill 1921 in toto.

Respectfully,

/s/

D. Vanitzian
[1] California Law Revision Commission, Study H-855, Statutory Clarification and Simplification of CID Law (Preliminary Part), MM07-24s2 (2007) (proposed repeal of the Davis–Stirling Act Civil Code Sections 1350 to 1378).
[2] See Evidence Code Section 1115 (Law Revision Commission Comments).
[3] See Evidence Code Section 1115 (Law Revision Commission Comments). See also D. Vanitzian, Expert Series: Common Interest Developments—Homeowners Guide 2007-2008 (Thomson-West).
[4] e.g., D. Vanitzian, Homeowner Associations: Dynasties of Dysfunction (2004).

CONDOGATE: DYING TO GET OUT!

CONDOGATE: DYING TO GET OUT!

By Donie Vanitzian, BA, JD, Arbitrator
(c)2006Vanitzian


Your Enemies Are Your Neighbors

An old Chinese proverb says, "If you sit by a stream long enough, eventually you will see the bodies of your enemies float by."

For those who own in a common interest development, today's adaptation has become, "If you own your unit long enough, your enemies will see to it that you leave in a body bag."

Figuratively speaking, if you don't leave, your home may become that body bag. If a homeowner's residence is subject to an association, a board of directors, covenants, conditions, and restrictions, then that homeowner has a deed‑restricted property and immediately that owner's asset is at risk. Whether incorporated or unincorporated, a homeowners association is not a democracy nor was it intended to be one and, it is certainly not a "home" in the traditional sense.

Your deed‑restricted home is in fact part of a business operated under the umbrella of a corporation which you and the other owners bankroll and in which you have little or no say unless and perhaps, you are a member of the board. Because it is a voluntary purchase and no one puts a gun to the buyer's head saying, "Sign here and buy this condo," the rationalization behind the concept is that the purchaser understands what he is buying into and does so voluntarily.

Hysterical predictions aside, the industry's intended consequence for those who own this type of housing is surprisingly simple. Once you make an offer and sign on the dotted line, pay your deposit, and close escrow, membership into the association is capable of effectively paralyzing you in unimaginable ways.

Strangulation by Deed‑Restriction

It takes very little to make living in this environment, unbearable. Some owners have likened their living in an association with a board of directors to a type of slow torture. E. M. Cioran describes such actions in this way: "Torment, for some men, is a need, an appetite, and an accomplishment."

After experiencing this type of living, many owners comment, "that nothing, absolutely nothing will ever be the same again." Titleholders are forced to live by rules some of which they didn't know existed and had no part in making. As one owner puts it, "When someone told me that neighbors I thought I could trust would lie to me, and that I would fall prey to sabotage and victimization, I didn't believe it. But it was true."
In this type of community many owners will be forced into situations that normal people with "real" lives on the outside, wouldn't give a second thought to. While you're fighting your board about books, records, accountings, insurance policies, meetings, assessments, fines, penalties, liens, cracked concrete, roof leaks, mold, plumbing pipes, and incompetent, malicious management personnel and association attorneys, your friends on the outside, will be indulging in other light‑hearted enjoyments ranging from dining at the theater to eating a Dodger Dog at the game.

While you're driving to and from Kinkos day and night, photocopying and filing association documents in order to defend yourself, your friends will be playing golf or tennis, driving through the countryside smelling wildflowers or getting their nails done. Be prepared to start buying file cabinets to park your growing stacks of paper.

As one owner put it, "My most productive years were wasted chasing down board meetings. I didn't realize just how much that was costing me, until I lost my job."

Bertrand Russell once said, "Most people would rather die than think: many do." As you watch the minute‑by‑minute depletion of your life savings, and worry what the hell you will do to support yourself once your money runs out, your friends will be sunning by the pool, gardening nasturtiums, playing with their nieces, nephews, and grandkids, getting dressed up for a Halloween party, or throwing confetti in the air on New Years Eve. You're just too damn tired and probably depressed to have a good time because your house is killing you. In fact, you've likely never looked nor felt worse in your life.

But I Can't Afford to Move: You're Right!

A deed‑restricted property is the kiss of death. Once the folly of association living is discovered then the obvious next move is to immediately cut your losses and get the "hell out of there." It is then that you discover the sting in the tail. Moving from a deed‑restricted property to one without restrictions of similar size and location may at first appear to be a "like‑for‑like exchange," however, when it comes to pricing that's where the similarity ends.

The fact is that unrestricted property is much more valuable than it's restricted counterpart. And the big question for owners who bought into the "affordable living fraud" is; can they afford the extra cost and higher property taxes to break out of the condo trap?

The test: Even though the majority of owners are prevented from moving into a "comparable" property because of their restricted titles, one can still hear owners bragging, "My condo has appreciated hundreds of thousands of dollars throughout the years." That appreciation however, is somewhat irrelevant if it is not enough for you to make a like‑for‑like exchange in real time. Compared to other "REAL" real estate, your deed‑restricted title is immediately DEVALUED because you are unable to move into a comparable "freehold house" for the SAME money in the SAME area.

Don't Expect an Intervention

There is no realistic "Condo 101" course for buyers. If such a course existed, there would be no buyers. The real‑life course begins when the buyer signs the sales agreement or makes an offer without reading it or understanding what it is that they are buying. "The sales person told us that this is a good deal, its affordable, and all the neighbors are volunteers pitching in," says one owner, "but no one told us, neighbors would pitch in to destroy us."

One senior explains, "I was told, the only thing I had to do was pay this really small monthly fee that takes care of everything. I was led to believe this was the type of freedom I was looking for. They told me I would be left alone to do whatever I wanted and that the place basically ran itself. Looking back, boy was I stupid, just plain stupid. If I had been a drug addict at least someone would have given me an intervention, but here, I've got nothing."

It's Not the Condo That's Deteriorating ‑ It's You!

It is no wonder that owners say they're "worn out and broke." As the association's special brand of protracted venom painfully and hopelessly numbs your senses and dulls your mental capacities as to what you are missing in life "outside" those gates, you become acutely more aware that on the "inside" if YOU don't fight for yourself, no one else will.

It is really hard work protecting yourself and your personal assets in a corporate environment like this. Successful survival consists of conforming, keeping one's mouth shut, and being submissive to over exuberant or obnoxious boards, and even if you do that, it will not protect you from rising assessments and threats from association boards and their attorneys or from foreclosure. It also will not protect you from having to fund irresponsible beautification projects dreamed up usually by stupid boards who are pressured by financially motivated management companies and their vendors. As one ex‑management company owner laughingly said, "don't mind us, we're just here to drain your bank account."

Death Is Not the End ‑ There Remains the Litigation

Those words from Ambrose Bierce say it all. Should an owner's problem escalate into a lawsuit against the association or its representatives: be prepared to fight that war to the end, even if it's the end of YOU. With regard to associations, more often than not, lawyers and lawsuits create a bigger drain on the titleholder's personal resources than the original problem probably did.

In the words of Jean Giraudouz, "You're an attorney. It's your duty to lie, conceal and distort everything, and slander everybody."

Too many owners make the fatal error in believing they can "get even" or "get justice" by suing the management company or the board of directors. However, that's a really hard thing to do when all the cards AND the laws are stacked against you. The board or its management company has custody and possession of all the evidence. If you have not made a demand prior to litigation to copy those documents, your chances of ever seeing them once you sue, is substantially diminished. Even if you make a demand for those documents after litigation commences, what will you compare them to? The danger of entering into a lawsuit is that it has the potential of taking on a life of its own and once the titleholder enters litigation it may be extremely difficult to get out of it.

The majority of volunteer association directors have Officers and Directors insurance that is paid for by the association. Typically, this means that if the board is sued, the insurance company provides attorneys to defend them. Therefore, owners who sue their board or association are really suing the association's insurance company. Some of the toughest, meanest, most vicious attorneys on the planet work for insurance companies and they are trained to tear the jugular right out of your bank account.

Even if the board has insurance the owner is lumbered with paying their own attorney's fees and a percentage of costs for the board's representation. This money is usually obtained through the imposition of increased dues and assessments, special assessments, and emergency assessments. In some states the board can deplete the reserve accounts to fund litigation.

Be careful of prejudicing your case because you think you know it all, but in reality, you don't have a clue, and worse yet, you haven't figured out how badly you may have already prejudiced your case or how lethal representing yourself will be in a situation like this. That's just too scary to think about right now so you keep trying to forget about it. Worse: you don't yet realize how bad it will be when you hire your family friend or long‑time lawyer to help you. What that lawyer likely does not know, is that compared to what he will be up against, he is a sand flee in an elephant's ass. But at least you've got him until your money dries up. By the time he figures out that he hasn't helped your case, you'll be broke, he'll still be billing you, and you will feel as if you are one step closer to a pauper's grave.

The Corporate‑Living Body Bag

With nothing said of the disproportion or absurdity of foreclosing on a person's home for a pittance of its worth merely because the owner allegedly missed a lousy assessment payment, the headlines continue to read: "Condo Sales Up! Up! Up!" Meanwhile the board's emotional tripe continues to be documented in the minutes ‑‑ the same minutes they will use to destroy you. During this time, boards try to sound professional on paper by presenting industry hopefuls to speak on their expertise on what went wrong, where, and how the board will substantiate spending more money ‑ your money ‑ on bad ideas.

It is not difficult to get people to serve on a homeowner association board of directors. Finding individuals flattered by the attention and euphoric in their unbridled power has become commonplace. To get elected, most promise great things but nearly all end up expanding their role beyond what is required by law. In this arena, the integrity of governance and management is bastardized.
There is also nothing intellectually stimulating about a position on a homeowner association board. Apart from its capacity to operate in an autocratically cutthroat manner, it is nevertheless a no‑brainer and a "jump‑on‑the‑bandwagon" type of position. The association directors' elevated status compared to that of the other titleholders is at the peril of those owners who are not in a position to authenticate the board's actions or to oversee the collective finances in any meaningful manner. Dangers of abuse are both immediate and costly for owners. Consequences of this anomaly in the law results in a devastating outcome to those members and property owners who are unable to adequately protect their interests and assets.

Too many owners of deed‑restricted property located in California are our new urban poor and unlike Oliver Twist, there are no wonderful Dickens characters waiting in the wings to save them. Instead, these owners are stuck clinging to the false hope that maybe, just maybe "one" law will be passed to benefit them and not the industry. As California courts continue to grant deference to decisions made by these association boards, the sociological failure in housing is allowed to proliferate and diminish the titleholder's roll in the oversight of their own property.

Hypocrisy of Majority Rule

The smart owner is the one whose intuition is on high‑speed working to alert him to cut his losses right now. Not tomorrow. Not next week. But right now. He trusts his intuition and fully understands that his fiscal and emotional survival depends on it.

As the board's piffle dribbles on, how many times has your board said, "The majority has spoken?" Board members that are outnumbered by the seated majority are worthless. Their hands are tied and their contributions are discounted. Once the power has been usurped, the mechanism already in place for governance feeds only those who are in power while disenfranchising all others. Association‑related wrongdoing is predictably unchecked and when caught, excused away. It is virtually the new "Wild West." Though in the old Wild West, "due process" was a bullet. Here, it is fines, lawsuits, foreclosure, and in some cases, that body bag.

HOMEOWNER ASSOCIATION COMMUNITIES: DYNASTIES OF DYSFUNCTION

HOMEOWNER ASSOCIATION COMMUNITIES: DYNASTIES OF DYSFUNCTION


By Donie Vanitzian, BA, JD, Arbitrator
(c)2006



In centuries past, an emperor could decide the fate of an entire community with nothing more than a nod of his head. Some believe a similar system exists today, but instead of one emperor there are boards of emperors who on a whim can decide the fate of an entire community of homeowners.

A quasi‑judicial authoritarian panel is established called a "board of directors" which has an unmatched gift for political maneuvering. Directors don't need campaign contributions to stay in power because association operating funds can be plundered at will. The unchecked controls to distribute, gather, and process ballot and proxy votes ensures the imperial board continues its reign. Like dynasties of old, homeowner associations can fall prey to a debauched mistreatment of its owners.


MANAGERS OF MODERN TYRANNY

In the face of crumbling individual rights, censorship is encouraged and laws are passed that further prejudice homeowners. Not unlike feudal systems, boards delegate their authority to handpicked aiders and abetters who carry out their demands. Rebels, dissidents, and rivals of those in control are easily silenced or alienated from the faithful followers In struggling to fight their aggressors, owners are peppered with intimidating salvos delivered by modern day lackeys like lawyers, managers and industry vendors. The job of aiders and abettors in the pecking order is to push through the board's agenda. As those minions become autonomous, the result is a wholesale disenfranchisement of those who are not part of the "chosen" few.


YOUR COOKIE, THEIR FORTUNE

Confronted by aggressive sales techniques, owners are seduced into an illusionary world of affordable housing developments. Frequently, buyers are led to believe they are buying a house "and" a community. Such synthetic communities should be viewed as "commodities" that are in turn reaped by another commodity called "buyers." Of course, the ultimate commodity permeating this housing scheme is money.

Because voluntary purchases are difficult to regulate, buyer problems usually surface after parting with thousands of dollars in down payments. No owner wants to admit they failed to adequately investigate what they bought; yet buyers have been known to do just that.

Some buyers may seek to justify their bad decisions by overestimating the definition of "value." No doubt believing they are graduating from the middle‑class, new owners are quick to brag to friends that they have just purchased a condo packed with amenities. Irrespective of whether the buyer uses that gym or lap pool, they still boast of it. While wanting to leave others with an impression of accomplishment, little thought is given to the maintenance, risks and liabilities of all those "extras" accompanying their purchase. Owners choosing to ignore these added financial obligations later find themselves strapped for cash and unable to make ends meet. Unfortunately, the "largeness" of a development is often mistakenly analogized to the owner's personal success. Quite the opposite is true.


HUNTER AND HUNTED

"When a man wants to murder a tiger he calls it sport; when a tiger wants to murder him he calls it ferocity." --George Bernard Shaw.

Generally, community association industries are parasitic businesses, constantly blurring the line between profit and profiteering. This has resulted in the evolution of an industry that does little more than look and act indispensable. Sucking the lifeblood from owners held hostage by a defective legal system, it is an organism that has perfected taking advantage of those that are most vulnerable.

Without the legislative mandate that owners must belong to the association and pay fees, the organism feeding and growing on those laws would shrivel up. Unable to otherwise nourish itself, the industry can be found wallowing below the association's bowels eagerly living off its excess and swallowing whatever morsels it sucks from its host. It is the homeowner's personal wealth that feeds those parasites which contribute nothing of consequence to the owners' well being. Like traditional hunters, the industry's survival depends on eating their kill.


THE GREAT WALL OF INEQUITY

Beige paint and potholes aside, artificially created communities undermine the social system as non‑board member owners are relegated to positions of second‑class citizenry. Built into this artificial aura of community is an unspoken association ranking order that is arbitrarily decided by a few persons perceived to be oh‑so‑important. This ranking order frequently reflects the wishes of influential members rather than the merits of those elected to the board or the "real" majority. Such living environments promote exploitation of those under it. Here, an owner's life can become subject to power‑mad rulers with the means and ability to ruin and financially devastate them.

Only the owner has a vested interest in property, yet, outside vendors are often allowed to wield their influence on directors. This leaves owners who are lowest in the social order with minimal bargaining power over their living environment and assets. Because owners essentially relinquish control of their assets to those who have been elected to the board, the owner is burdened with a double financial risk.

The owner's financial crisis differs substantially from the association's financial crisis. An association always has Acash requirements,@ and by law it can raise cash on demand from each owner. Even with this ability, these communities can remain in a constant flux of not being able to meet its liabilities. This means that a Again@ for the association results in a corresponding Aloss@ for each owner, subjecting seniors in particular to potential personal financial distress. --T.Foster Real Estate Broker, Certified Personal Financial Planner

As almost nothing in a community setting is designed to be resolved to the satisfaction of all owners, nearly every financial crisis a board faces can keep recurring. In this oppressive regime, owners become dispensable pawns.


MULTI‑HEADED DRAGONS

For all the pomp and circumstance extolling spectacular benefits of community living, it is for the most part, excruciatingly boring, repetitive, time‑consuming, and expensive, all, with little or no tangible return for owners.
Owners at odds with their association are similar to a minority shareholder taking on a corporate monster whose personality is both dysfunctional and manic. Picture a five‑member board of directors, each with a different personality. As the board changes, so do the personalities of its directors. The multiple personalities of each successive board serve to hinder owner autonomy.

The stakes are high for homeowners and an unintentional mistake or error in judgment can have devastating results. The owner's position is instantly prejudiced not only by statute and case law, but also by the inferior status this environment accords. His membership is contingent on restrictions and rules he may not have seen, agreed to, or know to exist. Depending on the rules of any given association, fines, liens, and foreclosures can all occur. Yet, by law the owner must subscribe in order to belong to this fictional entity.


NO TIME FOR TEA

At first it may be unclear and frustrating figuring this out, but homeowners must understand the relevance of their inferior status in relation to the association and its board of directors. Start by treating the corporate association‑entity for what it legally is ‑‑ a corporate fiction created to operate a business. That business is the "association." Next, view the board of directors like any other corporate board, except here, each director is "expected" to be in a "conflicted" position because they are both homeowner and director. When approached by the multiple personalities responsible for the owner's demise one must remember it is impossible to reason with a "fiction."

Given the large turnover in such developments, accomplishing anything becomes a feat in itself. In this atmosphere, it is a challenge for the owner to merely stay on track and stick to a viable game plan for emotional, financial, and physical survival. The corporate entity's adeptness lies in creating confusion and frustrating the opposition. Owners are the opposition. "Every problem the owner encounters steals days, weeks, months, and years away from their life ‑ none can be recovered."


THE TAO OF TERRITORIAL RULE

Each newly elected board establishes its own dynasty and conquers the membership anew. In a real dynasty, mistakes in an emperor's judgment might lead to the downfall of the regime. In an association such mistakes might systematically be ignored or recur at great cost to owners, but the board goes on.

Directors can be influenced by irrational recommendations from those who lack the skill or expertise to render advice, while others succumb to a mob psychology resulting in poor decision‑making and costly mistakes. "Once the psychological investment is made, more often than not, boards are loath to back down, even if doing so is the right thing to do."

By exploiting a failed legal system, boards avoid responsibility for their incompetence and greed by blaming global economics and deteriorating infrastructures. Circumventing political disorder while ensuring control of burgeoning fiefdoms, over‑confident boards take office by dynastic succession while bypassing scrutiny over an election process. In many associations each new board will consume the financial surpluses accumulated during their predecessors' term and then invoice owners for more. When the board's system of alliances proves untenable, it often plunges into a condition of internal anarchy. Actions like these can result in the indefinite rise of owner assessments and fees to replenish operating accounts in order to stay solvent. As these internal control‑monopolies thrive and property is debased, each owner's emotional currency is tested in ways they never thought possible.

Boards act to benefit the association and not the owners who are responsible for bankrolling the fictional enterprise. Uprisings by owners are gaining ground because their finances and hardships are discounted and their assets are at risk. High‑density over‑building, concentrations of noise, water, and traffic pollutants are aggravated by population migration. With each passing year, owners watch their property‑related payouts and taxes increase while their property rights are reduced.

Self‑assured directors are sustained primarily by virtue of their own use and misuse of homeowner funds. This abuse is virtually unchecked because there is no meaningful statutory accountability. An owner's only weapon to dislodge entrenched directors or those managing these dysfunctional dynasties entails the constant overthrow of those in power. Abolishing a system of exploitation takes extensive planning, consistent dedication and the financial means to sustain oneself during this time.


PERVERSION OF THE FITTEST

Something happens to owners when they are in an environment like this. By virtue of nothing more than a "membership" people who might otherwise champion against civil liberty violations or other medieval actions, find themselves promoting if not dispensing toleration of unacceptable behaviors. When aiders and abettors praise an errant board's "wisdom" or propagandize their perceived successes, it is accomplished at a great loss to owners.
In general, homeowners living in communities are "followers" and most reserve a special brand of contempt for their leaders and rulers. Those playing the part of "director" routinely fancy themselves as possessing a type of scholarly acumen, when in reality they sport nothing more than a pedestrian intellect and paint‑by‑numbers leadership ability. Incredibly, no matter how incompetent these leaders are, owners continue to support them.


INVASIONS

Ongoing intrusions and interferences into the lives of owners consisting of meetings, hearings, violations, warnings, intimidation, and restrictions serve to distort reality. These surroundings produce an abhorrent stimulus that elicits a conditioned response by its residents all in the name of "belonging."

The intensity of living under the rule of an association has the ability to transform personalities. It deliberately impairs natural characteristics on an interpersonal level to instead value and perceive events in a certain manner in order to be accepted and fit in. This occurs even if that type of acceptance is contrary to one's own philosophical and moral beliefs.

Even in the midst of pandemonium, owners must ferret out and stockpile evidence for use at a moment's notice. Obtain and keep as much information from as many sources as possible, particularly meeting minutes.

Wanting to protect their interests, owners looking for solace by hiring an attorney may find that reliance misplaced. Cost aside, owners complain that information provided to their attorney was rejected early on, but during litigation turned out to be critical. By then it was too late to develop evidence in a meaningful manner.

The association's well‑funded arsenal of legal weapons is constantly replenished. Lawyers, letters meant to frighten, restraining orders, lawsuits, fines, penalties, assessments, liens, judicial and non‑judicial foreclosure are at the ready. Like emperors who killed not only their victims but also their families, boards have the ability to legally destroy any owner. Then like rats deserting a sinking ship, directors cut their losses. They KNOW what's coming down the pike ‑‑ they sell their property and disappear.

È

FORGET KHAN AND HITLER; INDUSTRY'S ROLE MODEL IS THE CALIFORNIA LEGISLATURE

FORGET KHAN AND HITLER; INDUSTRY'S ROLE MODEL IS THE CALIFORNIA LEGISLATURE


By Donie Vanitzian, BA, JD, Arbitrator
(c)2006


THE DICE OF THE LEGISLATURE ARE ALWAYS LOADED

I am so sick of hearing the shallow chatter of homeowners perfecting their whining technique, "But what can I do? I'm only ONE person. No one's going to listen to ME. I don't have the time."

There is little meaningful input from homeowners to our legislature. Of that "input" it certainly does not amount to a significant concerted effort that will make a difference in the laws governing us. Most of the input from owners toward what's happening to them by the legislature amounts to nothing more than banal banter. Perhaps they do not fully understand the laws they are forced to live with and by, but that really is no excuse.

After all, they chose to buy that property that they own. Excuses aside for their poor choices, no one put a gun to their head and said "you will enter escrow." Interestingly enough, the same owners that sit around and discuss patio fences and amenities for five hours, can't be bothered to pick up a pen and paper and blast the legislators who are responsible for bastardizing laws governing how we are forced to live. Or, worse yet, they don't vote in their association's elections and they haven't bothered to read their governing documents, never mind they don't have a clue what a proxy or a ballot is. Or, even if they do, everything's rigged so why bother.

Then there are the homeowner letters that Legislators bury or lose. We'll never know how many of us did try to have our voices heard. All are meant to discourage our attempt to obtain fairness in the laws.

The saying in criminal law is, "if nobody talks, everybody walks." That's what's happening here. The owners aren't complaining loud enough, or they are complaining about the wrong things, or they are not convincing enough for anyone to take proper notice, so the criminals ‑ you know who they are ‑ are out there, "walking."

Nowhere is this more prevalent than in associations where owners moan and groan, "I don't know where the money is going!" Me: "did you make a demand to look at the books and records?" Them: "well yes, but I didn't get an answer." Me: "Did you make another demand?" Them: "Well, kinda, I saw some books, the ones they let me see." Me: "And you settled for that did you?" Them: "What else was I supposed to do?" Then there are those who say , "none of our association's numbers add up, I know my board is lying to me!" Predicable question follows: "And then what did you do, nothing?"

The problem with these realities is that they repeat themselves a billion times across America. The money too, adds up to billions in lost homeowner funds. Well, "lost" isn't quite the right word, "theft, robbery, embezzlement, deceit, fraud" are probably more realistic terms. But is it really theft when the board of directors is RESPONSIBLE for watching the fox in the henhouse? If you hire criminals do you not get what you paid for?

Here's what all that boils down to for owners: You don't care if you are lied to.


INDUSTRY INSURGENTS

The industry are not per se insurgents, they are an organized gang. That's right, they are legal gangsters. How did the association industry come to own our legislature? The industry is not armed in the literal sense, but they are no less "armed." They are armed with money. Industry wields an unearned air of authority through campaign contributions. While money can't buy you love, it can buy you a Senator or Assemblymember or even an impressionable Zogby poll or two, which in turn influences let alone buys, the laws you need passed. They now spin and beat that poll to death. Where did that Zogby poll end up? It ended up being quoted in California's legislature in support of that bogus Ombudsman's bill. Industry's opposition or armed resistance so to speak, to an established government that was supposed to protect us as homeowners has far more influence than a simple owner of a piece of property.

Let's go back in time for just a moment. Carefully ponder these three historical events: Genghis Khan conquered provinces inch‑by‑inch eliminating competition by destroying those humans who competed with him. "Him" is not plural. It is singular. Khan was a Mongol conqueror who then united the Mongol Tribes. Genghis Khan became "plural" when he gathered support. The result of his efforts was a gain in HIS 'land.' He conquered Turkistan, Transoxania, Afghanistan, and raided Persia and eastern Europe and did it by killing people and taking what they had. The key here was Khan's ANNEXATION of northern China, central Asia, Iran, and southern Russia. With the gain in land his influence and prominence grew exponentially and ruled the greatest land empires of history.

Nomads, otherwise known as "turks" from Turkistan wanted what others had as well. They liked what other successful and thriving nations had accumulated, but didn't want to work that hard toward accomplishment. So they just "took" what they wanted. After all, Genghis Khan did it, why not the turks. The turks planned an extermination. They accomplished their means by annihilating through genocide, the already successful Armenian people (at that time a thriving large country). [FN1] Not only was the Armenian culture stolen from them the devastation of the Armenians occurred in their native homeland. U.S. Ambassador Morganthau stated, "The most terrible scenes took place at the rivers especially at the Euphrates, in a loop of the river near Erzinghan . . . the thousands of dead bodies created such a barrage that the Euphrates changed its course for about a hundred yards." Instantly, the country of Turkey was put on the map and quick to rewrite history due to their thievery yielding a new found "heritage" from others who took centuries to build it. At the time, Turkey had no real ascertainable culture of their own. Theirs was a culture that was obtained by pillaging the riches of others and Turkey's prominence grew exponentially. [FN3]

Soon the whitewash by way of spin machines sprung into action, "The goal of the Turkish government and its collaborators is to undermine the authenticity of the Genocide [and] expunge it from the textbooks." [FN1] Turkish officials: "You don't seem to understand what we want. We want an Armenia without Armenians." [FN6]

The lack of "action following the Armenian genocide was an important precedent for the subsequent Jewish Holocaust of World War II." [FN2] Hitler wanted a Germany without any Jews, and toward the end he wanted a world free of Jews. [FN3] In both the Armenian and the Jewish cases, when given the opportunity individuals were forced to conform (change religions or beliefs) or be killed. Hitler annihilated an entire race person‑by‑person then graduated country‑by‑country to fulfill his takeover of the world.

Hitler praised Genghis Khan. "On August 22, 1939, Adolf Hitler gave a secret speech to his top military advisers, outlining his plans for German settlement of Poland. The speech so shocked his audience that a copy was smuggled out to the British embassy. What follows is the transcript, now in the files of the Foreign Office in London." [FN4] Hitler said: "Our strength lies in our quickness and in our brutality; Genghis Khan has sent millions of women and children into death knowingly and with a light heart. History sees in him only the great founder of States. [referring to the Turks he said] Who still talks nowadays of the extermination of the Armenians?" [FN4,5]


THEY ARE TAKING YOUR PROPERTY

Taking away our real and personal property today is much easier than changing the course of the Euphrates. But the ease and progression of taking our assets is no less painful or calculated than centuries past. Oh it's nothing as sinister as contemplating the return of the Ottoman Empire, but given the totality of the circumstances the industry's quickness and brutality is no less devastating.

Like the turks who wanted what others had but didn't want to work that hard to get it, industries today have devised ways to merely "take" what they want. The industry is not interested in legitimacy, they don't need to be interested in something as mundane as THAT. They have no interest in articulating a unified ideology because they already own the laws and lawmakers that govern titleholders. Their indignation lies in the fact that they are burdened in dealing with homeowners at all. They are repulsed by the fact they simply cannot stick an intravenous device directly into our bank accounts. Not to worry, they are nearly "indirectly" there. The recapture of our equity is part of that intravenous drip. Our equity is depleted in many different ways; these silent killers deplete your personal assets while you sleep.

Drip: The creation of another government bureaucracy named Ombudsman.

Drip: Pay to fund the Ombudsman office and pay for material distributed by them.

Drip: Pay the California Secretary of State a per‑association registration fee of $50.00.

Drip: Pay escrow transfer fees that keep getting porked up.

Drip: Pay 20%+ rise in assessments without a vote and going up.

Drip: Pay special assessments.

Drip: Pay emergency assessments.

Drip: Pay association judgments.

Drip: Pay association attorneys.

Drip: Pay for your own attorneys.

Drip: Pay for association insurance policies.

Drip: Pay for management company to file a bogus notice of assessments on your title courtesy of your stupid board.

Drip: Paying mystery fees.

Drip: Pay for association parties and functions and attendance at seminars.

Drip: Pay for management company unaccountability and infiltration of your association.

Drip: Pay for board of directors unaccountability through insurance indemnification.

Drip: Pay for the association's attorney retainer agreements and fees, fees, fees.

Drip: Pay the association to bring lawsuits and restraining orders against owners like you.

Drip: Pay fines, penalties, foreclosure, loss of Homestead exemption


Drip: Pay for maintenance.

Drip: Pay for incompetence.


And the drip goes on . . .

Why is history so important to us in what seems such a minor problem in comparison to the discussions above? Because piecemeal the outcome of industry's influence will have no less an impact than the outcomes above. How will you start over? What will your new quality‑of‑life be like? What could be worse than losing your property or personal belongings that took you a lifetime to acquire? Those in the events above lost their properties and their personal belongings to thieves. Obviously, as homeowners we are unlikely to be murdered in the literal sense, BUT as more laws are activated stripping us of our rights, we are unable to protect our homes, families, and personal assets. The results are that we end up being the personal banking system for a parasitic industry. We lose our individual accumulated wealth and our lives are paralyzed. Ruined. Destroyed.

What has happened to private individuals through time will also happen to us. Death may not come in the literal sense, but what's left over may be worse. Not unlike those who are dependent on life support controlled by strangers ‑‑ once bankrupted or gradually stripped of our personal assets to the extent it will be impossible for us to experience life as we once knew it or as we want to know it ‑‑ we are in no better position than those plundered and left behind by the nomads. Perhaps you'll find that pen and paper now and write that letter you've been meaning to write.

FOOTNOTES:
[FN1] During the Hearings Before the Subcommittee on Future Foreign Policy Research and Development of the Committee on International Relations House of Representatives, 94th Cong., 2d Sess (May 11, Aug. 30, 1972) Washington DC 1976, Testimony states: AUnprecedented in human history, the Turks resorted to a device that involved the release from all prisons of the Ottoman Empire and the most blood‑thirsty criminals called in Turkish kanli katil, estimated to be between 15,000 and 20,000. They were put in military uniform, retrained and deployed strategically so as to execute the task of mass slaughter under most primitive conditions.@

[FN2] V. Dadrian, Genocide as a Problem of National and International Law; The World War I Armenian Case and its Contemporary Legal Ramifications, 14 Yale J. Int'l L. 221 (1989).

[FN3] Vanitzian & Kopkin, 'In the Name of the People' ‑‑ A Faustian Paradox: The Betrayal By Physicians, Lawyers, Judges, Academics and Ethicists of the Sovereign People's Ultimate Civil Liberty (1997).

[FN4] Hitler's Plan's for Genocide: A Speech From 1939, 313 Brit. Med. J. 1416 (1996).

[FN5] Louis Lochner, Office of U.S. Chief of Counsel for Prosecution of Axis Criminals (Berlin correspondent for Associated Press), 7 Nazi Conspiracy & Aggression 752‑754 (Washington, D.C. 1946).

[FN6] V. Dadrian, The Naim‑Andonian Documents, 19 Int'l J. Middle East Studies 332 (1998).

PARASITIC ASSOCIATION INDUSTRIES EAT THIER KILL

PARASITIC ASSOCIATION INDUSTRIES
EAT THEIR KILL


By Donie Vanitzian, BA, JD, Arbitrator
(c) 2006


A Lesson in Sucking the Lifeblood from Homeowners


When an industry is truly a "business" it has a "product" to sell, however, in the community association industry those shelves are "bare." Nothing on them. Nothing in them. Nothing about them produces anything of value for the homeowner. In their book "Villa Appalling! Destroying the Myth of Affordable Community Living," Vanitzian and Glassman discuss the end of the 18th century and the first Industrial Revolution as it occurred in Great Britain. They explain, that the commodity at that time consisted of "manufactured goods and an ever-increasing workforce" to support the increased production. It is established that national per capita income rises along with successful industrialization -- this means that employment opportunities flourished back then because it was all about "products and production." BUT, when that industrial society transformed into the Post Industrial society, as it is today, there were no GOODS to produce.



BUYERS AND HOMEOWNERS ARE THE INDUSTRY=S NEW COMMODITY

The Post Industrial commodity deals with "service." Because they don't have a "product," association-related businesses surrounding the common interest development industry fall into this category by offering and selling "services." They found a niche for themselves before anyone else could jump on the bandwagon and they capitalized on it quickly. These industries created a problem where none existed before AND they provided the answer to that problem under the guise of association-related services.

If these association-related businesses have their way, they want their services to be mandatory and chiseled into the law. In other words, they want their permanent paychecks written into the statutes in every state. With this permanence comes a loss of choice for consumers and the unstoppable growth of common interest developments that includes community associationrelated monopolies. You know who they are, vendors, including attorneys and management companies.
These association-related industries have come to own our laws. The fingerprint of capitalism becomes more evident as these industry businesses move into our legislature's own bedroom. That fornication results in a "mandated reimbursement of all their costs" written into the laws that rule residential deed-restricted homeowners and that we are forced to abide by. The way these so-called "cost reimbursements" are written into the California laws will blow-your-mind! Nowhere else in the California laws do reimbursements exist to this extent, only in common interest developments. IF the industry cannot get these reimbursements written into the laws, then they write them into the association's governing documents, or persuade boards to amend their documents to provide reimbursements (how stupid is THAT?) or they write them into their contracts that stupid-stupid boards sign. Ever hear this B.S. from the board: "The attorney advised us to sign it." If the law won't reimburse these industries, then you-the-homeowner WILL. These industry reimbursements ranging from miscellaneous costs, liens, fines, penalties, foreclosures, result in cheaper operating costs and bigger profits for common interest development and association-related industries.

While their profits increase, homeowners find it impossible to stay afloat and pay the demanded rising association fees under threat of losing their homes. Because of that, the association-related industries soon EXPAND those profits and businesses by hiring industry-related contractors and vendors. And, the "Monopoly Beat" goes on.

Homeowners and associations across the nation become casualties in the process and are left absorbing these costs as they trickle down the accounts-payable ladder and mystery-fee line-items in pro forma budgets across America. Gee, I wonder why our fees keep rising?


WE WILL EAT YOU ALIVE AND MAKE YOU PAY FOR THE FEAST

Generally, community association industries are parasitic businesses that constantly blur the line between profit and profiteering. This has resulted in the evolution of an industry that does little more than LOOK and ACT indispensable. Sucking the lifeblood from owners held hostage by a defective legal system, it is an organism that has perfected taking advantage of those that are most vulnerable.

Without the legislative mandate that owners must belong to the association and pay fees, the organism feeding and growing on those laws would shrivel up and die. Unable to otherwise nourish itself, the industry can be found wallowing below the association's bowels eagerly living off its excess and swallowing whatever morsels it sucks from its host. It is the homeowner's personal wealth that feeds those parasites which contribute nothing of consequence to the owners' well being. Like traditional hunters, the industry's survival depends on eating their kill.

SEX, LIES, AND SATELLITES IN HOMEOWNER ASSOCIATIONS

SEX, LIES, AND SATELLITES IN HOMEOWNER ASSOCIATIONS


By Donie Vanitzian, BA, JD, Arbitrator
(c)2006

Think "community" cable or internet is a good thing? Or maybe a "shared" satellite dish makes sense? Think again. Very often, homeowner association boards of directors are under the mistaken belief that "uniformity" and "conformity" is better than an owner's ability to make their own choices ‑‑ and ‑‑ for the association, they might be right. But for the owner, it is the worst possible scenario because when owners "choose" to give up their choices, they also forfeit certain rights to privacy.


HOW DOES THIS HAPPEN?

It happens because, in a legal sense, the association and its board of directors are not an "agency" and typically they are not a per se "business" soooooo they are able to circumvent legislation aimed at protecting "consumers." Whether in an association or not, homeowners are supposedly consumers. It gets worse from here.


SEDUCED INTO TRUSTING LIARS

As the authors of Villa Appalling! state "function on the premise that your board is lying to you." If you do that, you could be light‑years ahead of the other owners who think waiting for the bus arriving to "nowhere" is a good thing. By the way, they're still waiting.

Relying on the human nature of board members to respond to owners is one thing, but to rely on a board to exert equitable and impartial justice, well, that's all but impossible. Remember, this is a gang protocol and it has nothing to do with democracy or complying with the law. It never occurred to these mostly illiterate and ill‑informed gang‑banger board members that homeowners own property just like the board gang members do. Gee, that's a revelation.

By statute, in an association environment the concentration of power lies in a handful of persons on the board of directors. Whether good or bad, all boards have one thing in common: the owners (supposedly) elect them. Some boards authorize improvements for their own properties but not others. Some boards sign contracts as long as they receive big perks making it worth their while to sign. Other boards will commit the association to deals that are so egregious they are unspeakable, and some boards believe it or not, are honest and decent.

You've heard of "dog‑years" and "cat‑years" well, add "association‑years" [FN] to those explanations. Enter: the recalcitrant board of directors. By the time owners learn of any wrongdoing and start asking questions, in terms of "association‑years" it's already too late. And, if owners ask too many questions they can end up being the brunt of a board's notorious cease‑and‑desist letters or threatened with restraining orders and law suits and all the while that association time clock is knocking years off that owner's lifespan and depleting their resources, not to mention running out the statute of limitations.

In relaying their agenda to the homeowners, boards may intentionally minimize their contract dealings with cable, satellite, and internet companies. Conversely, they may launch a hard sell to convince owners that "one" cable or satellite provider is cost effective. Downplaying their poor decisions, boards may emphasize that their queries are "ongoing" when in reality they are a "done‑deal" or "back‑doored."


EXPANDING THE MEANING OF DEED‑RESTRICTIONS

While owners are sidetracked into filling out permission forms for satellite dish or cable installations, the board gives the appearance that it is concentrating on controlling association "aesthetics." Frequently, the same board decisions that benefit the association will fail to benefit owners. While on the surface it may LOOK like owners have choices, those choices might consist of nothing more than strong‑arm tactics to pick colors of paint or decide where to plant the petunias.

It is difficult to verify the board's rendition of facts because they may be laced in distortions, omissions, or subjective elaborations. Owners, who by now have become conditioned into believing and relying on lies, typically go along with board recommendations. Yet, the consequences for owners who believe such lies can be devastating and financially crippling. Whether agreeing to install cable or other similar technological services owners may have inadvertently agreed to a "right of entry." It may sound something like this, "We will have to access your unit to maintain the system." Once the "right of entry" is signed, any association employee has access to your home at any time. When an owner attempts to sue, they may learn that they consented to the "right of entry" when they signed the agreement for cable, satellite, or internet.


SILENT ACTS OF PIRACY

Some associations want centralized email, internet service providers, and so on, only because they will own your every movement. Understand that your electronic information can be subpoenaed and used in a court of law against you. The problem in an association environment is that THEY already own the contract, so guess what? They don't even have to subpoena your information because they already have it. Contemplating suing your association? Remember this: They've already got your information, but you have nothing on them.

Are your viewer choices protected? The answer to that question depends where you live and what your contract with the supplier is. When it comes to something as simple as making a routine payment for their cable, satellite, internet bills, and even association assessment payments, too many owners fail to question where their personal information goes and who has access to it. As the common interest development infrastructure becomes significantly more complicated and unpredictable, many otherwise so‑called "routine" activities morph into opportunities for identity thieves and nosey neighbors to access personal information ‑‑ YOUR personal information.

Most people believe they have a reasonable expectation of privacy in their home. Owners casually turn on their television sets and assume no one else is watching, but them. Wrong! Once the contract is signed, the cable, satellite, or internet company will typically grant rights to the "contracting party," not the owner, not the user. Owners do not ipso facto have a correlating right of access to the information gathered on them by the vendor who contracted with the board, or the vendor the board shares the information with. Because the homeowner is not the contracting party, there are no protections for the users' right to privacy. Cries about a board's "overreaching" are only an issue IF owners make it one, and stopping these actions requires unrelenting pressure by owners.

It is difficult enough to get owners to persist in viewing their association's books and records; can you imagine owners getting together to stop this invasion of privacy?


DON'T CLICK THAT MOUSE ‑‑ DON'T TOUCH THAT REMOTE

As there is no per se mandate that associations protect owner privacy, investigators have been known to pay cash for your data. Finding the weakest link, they seek out boards, management, employees, and vendors. Homeowner associations are a goldmine for boards or vendors seeking to capture information on individuals they would not otherwise be able to access.

The California Davis‑Stirling Act limits liability for boards and associations, the so‑called protections that owners THINK exist, does not. Read the Davis‑Stirling Act carefully, language allows the board to redact information for a myriad of real and imagined reasons. The statute language is porked up with words defying definitions, like "reasonably likely" or "compromise." What about this: "No association, officer, director, employee, agent or volunteer of an association shall be liable for damages to a member of the association as the result of identity theft or other breach of privacy. . ." Do you still feel safe?


DATA‑MINING INFORMATION

No California statute mandates destruction of data collected by associations. Digitized owner data is kept long after the owner has sold and moved away. Owners may be surprised to learn decades later when they least expect it; data collected by the association can surface in court. Worse, it can be used against the owner because the association owns the data.

A byproduct of an individual's usage through technology is sometimes referred to as "clickstream data." Whether by cable, satellite, or internet, clickstream data stalks your identity and tracks your usage. This data is a unique fingerprint. It exposes everything you unwittingly give it.


EVERY MOVE YOU MAKE: WE'LL BE WATCHING YOU

The vast amount of data acquired on users, especially homeowners, is frightening! Right now, you will NEVER be sure just how much information your board already has on you. The problem is that most owners GIVE that information to their board without ensuring where it is going and WITHOUT DEMANDING PROTECTIONS beyond what is written in the present‑day laws that are woefully inadequate.

Your information is ripe for data warehousing which is usually stored and centralized for easy access. There is no limit for how long it can be kept. Owners may be unaware that using a password to access an association's web site might mean you automatically consent to allowing the association to monitor your interactions and give them the right to use your personally identifiable information. These, and other collection methods increase the risk of piracy. Even ONE association‑related lapse in internet, cable, or satellite security can have devastating consequences "forever."


WERE OWNERS TOLD THAT:
$ Personal information and viewing habits may be sold or shared without owner consent? This includes the board=s access to your email habits and the content of your emails -- don=t make the mistake of believing what your board may tell you about this, they do it, they can do it, and they will continue to lie to you about it.

$ Owners cannot opt out of the board's contracting decision, even if they don't want it, and even if they don't want their house wired for it?

$ ANY board at ANY time may have unlimited access to each owner's viewing habits and are free to profile owners? This includes FUTURE boards.

$ Owners may not have access to the "same" information as the board?

$ Owners may not negotiate better deals or communicate directly with cable, satellite or internet companies because they are not the contracting party?

$ Programming and viewing choices may be changed or curtailed at any time without owner consent?
$ Owner viewing choices and clicks of the remote may be permanently logged in a file forever and information made available to "any" director ‑ even future directors?

$ The association may use an owner's viewing history, programming choices, and clicks of the remote, against them, even in court?

$ Whether they like it or not, even if an owner's data is used or misused each owner agreed to the board's choices of providers or programming?

$ If the owner happens to be employed by a cable, satellite, or internet company, they may not be able to use their company's services, discounts, or other benefits?

$ This is a ticket for an association board or their vendors to enter your home "without consent" and, they'll do it under the pretext of "right of entry" to fix the service"?

$ Owners may have a duty to disclose these problems to prospective buyers?


THE ELECTRONIC MARKETPLACE WANTS:
g your age, gender, address, phone number, e‑mail address, how much you pay, when you pay, and to whom you pay it to ‑‑ and they are willing to buy this from YOUR BOARD;

g the dates and times you turn your television set on and off and the number of times you do this;

g the channels you watched and the programs you recorded;

g web site visits and patterns of access;

g your technology and server log‑on information;

g the transfer of the owner's information to a third party is immediately facilitated when they turn on their television set or send an email transmission;

g the information collected on you that is most personal and as such, is far more dangerous because you don't see it being collected;

g technology has evolved to the point of enabling people you probably already don't trust, to record, track, and monitor information on your viewing and financial habits;

g information garnered from each individual owner goes "somewhere," meaning it is stored "forever." Off‑loading this information to the company that essentially owns it, provide the company, and ultimately your board, with a mechanism to collect and keep data and information on you.

THE OWNER'S CLICK‑LIST:
# Don't ever email the board or management company ‑‑ ever!

# Don't ever communicate with the board or management company using instant messenger.

# Don't ever make the mistake of believing that merely because you pressed the "delete" key, it deleted data.

# Don't let the board convince you that payments are easier because charges are added into association assessment fees, or that one satellite dish is aesthetically better than others.

# Don't believe that such services will cost less overall because the association will be making a contract deal.

# Don't believe that having one provider cuts down on hird party vendor traffic into the development.

# Owners need time to obtain their own legal advice in order to make an informed choice and to be able to timely challenge the board.

# The owners' privacy rights must be defined.

# Without written assurances, penalties and damages for breach, you must assume that everything you just read, is happening right now.

Before ever writing that deposit check for a property located in a common interest development with a homeowners association, buyers should be asking questions and getting answers that satisfy them. If the answers are not forthcoming and not in writing: DON'T BUY.

[FN1] coined by Donie Vanitzian.